Airlines' Woes May Be Worse In Coming Year

By MICHELINE MAYNARD; Eric L. Dash contributed reporting from New York for this article, and Jeremy W. Peters from Detroit.

Published: December 27, 2004

Passengers who got caught up in the airlines' troubles over Christmas received a glimpse of what may await them in the coming year.

The winter storms and computer malfunctions, which snarled airport traffic from Philadelphia to Atlanta, may have been unavoidable, experts say. But the signs of labor unrest that cropped up over the weekend could be a harbinger of things to come in an industry already buffeted by bankruptcies and structural change.

With the six big airlines expected to lose another $5.5 billion this year, every one of them -- American, United, Delta, Continental, Northwest and US Airways -- has announced plans for deeper cuts in 2005. All told, they will reach $7.5 billion in spending and at least 20,000 jobs.

''We really have the tough part ahead of us,'' said Gerald A. Grinstein, the chief executive at Delta Air Lines, which avoided a bankruptcy filing this fall by persuading pilots to cut their pay by a third.

For passengers, the irreversible retrenchment by the airline industry, which has shrunk by a quarter since the start of the decade, has meant the loss of food service, a reduction in routes, flight delays, lost baggage and other headaches.

But if employees' reactions to these kinds of changes are anything like what US Airways experienced over the weekend, consumers are in for more serious disruptions.

Yesterday, US Airways, which is operating in bankruptcy, canceled 29 flights, on top of 300 cancellations on Friday and Saturday, when unusually high numbers of baggage handlers in Philadelphia and flight attendants elsewhere called in sick. Union officials said the sick calls were not organized.

Comair, a regional carrier for Delta Air Lines, also canceled flights for a second day. The airline canceled all 1,100 of its flights on Saturday after a computer malfunctioned, stranding passengers in cities like Cincinnati and Atlanta. The airline planned to operate just 172 flights yesterday and to return to normal by noon on Wednesday, according to the Air Line Pilots Association.

The situation at US Airways came on top of problems it had experienced for months in the Philadelphia baggage system. It led the airline to make unscheduled flights filled with suitcases from Philadelphia to Charlotte, N.C., for processing before being returned to passengers.

Amy Kudwa, an airline spokeswoman, said yesterday that as part of their compensation, some passengers who were stranded were put up in hotels, while those who did not have their bags would receive at least $50 for the first day and $25 for each day after that.

US Airways is by far the sickest of the major airlines. It filed for its second bankruptcy in two years on Sept. 12. It is demanding deep pay cuts from employees, who have already given two rounds of wage and benefit concessions.

In a memorandum on Dec. 15, US Airways told flight attendants based at airports in Boston, Charlotte, New York and Washington that they would have to fly an additional five hours a month starting in February to make up for staffing shortages. The memo came on the same day that flight attendants reached tentative agreement on a new contract that would cut their pay 9 percent and reduce benefits, including sick and vacation time. Before that agreement, flight attendants threatened to strike the airline if a bankruptcy court set aside their contract and replaced it with more spartan terms. Flight attendants at United Airlines, which also wants to set aside union contracts, have made the same threat.

Officials at the Transportation Department spoke with US Airways management over the weekend and were monitoring the situation yesterday, said Robert Johnson, a department spokesman. ''We're in a fact-finding mode,'' he said, adding that transportation officials would be ''deliberate and careful.''

The chief executive at US Airways, Bruce R. Lakefield, angrily blamed the ''operational meltdown'' on the ''irresponsible actions of a few.''

In a message to employees yesterday, Mr. Lakefield said: ''Let us not forget who pays our salaries -- our customers -- and this weekend did nothing to earn their confidence and their future business.''

Don Logan Jr., a US Airways maintenance worker in Philadelphia who took scheduled vacation during the holiday rush, said yesterday that management should have anticipated problems. ''Back at Thanksgiving, we were short,'' he said. ''Did they think it was going to go away come Christmas?''

''I don't blame any employee who wants to spend the holiday with their family after what they have been put through this year,'' Mr. Logan said.

Some US Airways workers are angry that Mr. Lakefield has not taken a pay cut, even though a bankruptcy court judge ordered emergency 21 percent pay cuts for union members. ''The extra presents under the tree that my kids didn't get this year, I'll tell him thank you for that,'' Mr. Logan said.

For some consumers, whose family reunions and hopes for a holiday break were foiled by the problems, this weekend may be the last straw. ''I don't think there's a tremendous amount of sympathy,'' said Gary Chaison, professor of industrial relations at Clark University in Worcester, Mass. ''Consumers are always ready at a moment's notice to jump from one airline to another airline.''